How your pension works
Depending on which section of the Fund you’re a member of you’ll have a defined benefit (DB), defined contribution (DC) pension or both. Because we talk about both DB and DC pensions on this site it’s helpful to know which you have. If you’re not sure, the timeline below shows the years each section was open, its name and whether it’s a DB or DC pension.
* Not available to new members from July 2015
** Not available to new members after July 2010
*** Not available to new members after July 2016
**** Not available to new members after July 2010
What happens to your pension after you leave?
Although you’ve left the Fund, your pension savings will stay where they are until you take your Nestlé pension or choose to transfer your benefits to another registered pension scheme. If you’re thinking of transferring out of the Fund, see Transferring out.
What happens to your pension between the time you leave and when you retire will depend on when you built up your pension, and what type of pension it is – either a defined benefit (DB) pension or a defined contribution (DC) pension.
How your Nestlé DB pension works
Generally, in a DB pension scheme, how much pension you receive broadly depends on:
- your pensionable earnings;
- how long you’ve been a member of the Fund; and
- the rate your pension builds up (known as your ‘accrual rate’).
This means you have more certainty around how much pension you’ll receive from a DB scheme when you retire.
When working out your Nestlé DB pension, we take into account three things:
- Your pensionable earnings when you were an active member of the DB section.
- The number of years and months you were a member of the DB section.
- The rate that you build up pension in the DB Section.
We put these three things into a formula to work out your pension.
For the pre-2003 Nestlé UK Pension Fund and Gold Seal the formula is:
For Silver Seal the formula is:
For Lane 2 the formula is:
For Lane 3 the formula is:
For DB Core the formula is:
For DB CorePlus the formula is:
If you have worked for Nestlé more than once or have switched between different sections your pension is worked out by calculating each period separately and then adding them together.
Protection from inflation
To help it keep up with inflation, your DB pension is increased each year. We increase your pension differently, depending on when it was built up. As this can vary from person to person, the best way to find out the current value of your deferred pension is to contact the Nestlé pensions team who will be able to provide you with a personalised statement.
How DC pensions work
In a DC pension scheme, your account builds up from:
- contributions from you;
- any contributions from Nestlé; and
- investment returns.
You can choose how to use your account to provide income at retirement. The income you get will depend on a number of things, including those listed above and the choices you make when you retire.
When you become a deferred member, the value of your DC account (including any additional voluntary contributions you may have paid to DC Core), will continue to go up and down depending on factors such as:
- the investment charges you pay
- how your investments perform.
Read more about investments and how they work on the Your investments page.